State grants 1-year reprieve to plans that don't meet rules of health reform law

Nov. 20, 2013

Gov. Bill Haslam / Jae S. Lee / File / The Tennessean

Written by

Shelley DuBois

The Tennessean

:

The state of Tennessee will allow insurers to continue to offer plans that otherwise would have fallen short of new requirements under the Affordable Care Act.

The Department of Commerce and Insurance officially authorized the one-year continuation of those plans on Tuesday.

“Tennesseans should be able to keep the health care coverage that they were promised they could keep,” said Gov. Bill Haslam in a release. “To have an insurance market with a variety of options is good for consumers and good for Tennessee.”

The extensions will be permitted for one year, said TDCI Commissioner Julie Mix McPeak, adding that it is up to insurers to decide whether to offer plans they might have been preparing to eliminate from their offerings.

“It is important that we have a diverse insurance market and that we’re providing Tennesseans with plans that are the best fit in terms of benefits offered and cost,” McPeak said.

The state’s largest health insurer, Blue Cross Blue Shield of Tennessee, announced late Friday that it planned to extend coverage for plans that had been deemed invalid under federal health reform.

Haslam’s office recommended that consumers with questions about specific policies contact their insurers for details.

Last week, President Barack Obama, facing criticism even from fellow Democrats over problems with the health care law, announced that companies can continue providing coverage for a year under policies that do not comply with new requirements. However, the option would only apply to existing customers of those plans and would not be extended to new customers.

That left insurance companies and individual states to determine how to respond to the president’s decision.

Earlier this month, Blue Cross Blue Shield said it was planning to notify 66,000 Tennessee policyholders their current coverage would be canceled on the policies’ anniversary dates because they did not meet new federal guidelines under the Affordable Care Act.

There are signs of resistance among some state insurance commissioners, who would have to agree to allow Obama’s proposed change to take effect. At the same time, industry officials and commissioners alike warn that premium prices could rise beginning with 2015 coverage plans if the changes go into effect.

The cancellation issue is only part of the woes confronting the president and his allies as they struggle to sustain the health care law.

Last week, federal health officials revealed that just 26,794 people enrolled for health insurance through the federal website during the first, flawed month of operation, and a total of 106,000 who signed up through the federal and state exchanges — a small fraction of what they had projected. Florida had the highest enrollment — 3,571 people — among the three dozen states relying on the federal website.

Days later, the House voted to weaken a core component of “Obamacare“ and permit the sale of individual health coverage that falls short of the law’s requirements. More than three dozen Democrats broke ranks and supported the legislation, a total that underscored the growing importance of the issue in the weeks since millions of cancellation notices went out to consumers covered by plans deemed inadequate under government rules.

The Associated Press contributed to this report. Reach Shelley DuBois at 615-259-8241 or sdubois@tennessean.com. Follow her on Twitter @shelleydubois.